Reliv International Reports Fourth-Quarter and Full-Year Financial Results for 2017

CHESTERFIELD, Mo., March 27, 2018 (GLOBE NEWSWIRE) --

Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the fourth quarter and full year of 2017.

Fourth-Quarter Results

Reliv reported net sales of $9.9 million for the fourth quarter of 2017, compared with net sales of $10.6 million for the fourth quarter of 2016. U.S. net sales decreased by 8.5 percent for the quarter compared with the same quarter in 2016. Net sales outside of the United States increased by 0.6 percent in the fourth quarter of 2017 compared to the prior-year quarter.

Reliv reported a net loss of $382,000, or loss of $0.21 per diluted share, for the fourth quarter of 2017 compared with a net income of $272,000, or earnings of $0.15 per diluted share, for the fourth quarter of 2016. Income from operations for the fourth quarter of 2017 was $141,000 compared to $275,000 in the same period in 2016. The impact to operations from the decrease in fourth quarter 2017 net sales was partially offset by a reduction in selling, general and administrative (“SGA”) expenses. SGA expenses decreased to $4.1 million in the fourth quarter of 2017 compared to $4.3 million in the fourth quarter of 2016. Income tax expense was $517,000 for the fourth quarter of 2017 primarily the result of non-cash adjustments to our deferred tax assets, including a $509,000 valuation allowance recorded against the value of net operating loss carryforwards in our European subsidiary.

Full-Year Results

Reliv reported net sales of $41.8 million for 2017 compared with net sales of $45.5 million in 2016. U.S. net sales decreased to $32.5 million from $35.6 million, a decline of 8.8 percent.

Net sales in Reliv’s foreign markets for 2017 decreased 6.1 percent compared with net sales for 2016, with 3.4 percent of the decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar in certain markets. The decline in net sales in Europe represented a significant portion of the decrease in foreign sales. Net sales in Europe declined by 16.6 percent in 2017 compared to the prior year, with 4.3 percent of the decline due to the impact of foreign currency fluctuation. Sales in Asia increased by 39.7 percent in 2017 compared to the prior year.

The net loss for 2017 was $697,000 (loss per diluted share of $0.38) compared to a net loss of $625,000 (loss per diluted share of $0.34) in 2016. The loss from operations for 2017 was $183,000 compared to a loss from operations of $812,000 in 2016. SGA expenses were $17.9 million versus $20.2 million in 2016, as the continuing effect of a cost reduction program implemented in mid-2016 helped offset the impact of the sales decline. Income tax expense for 2017 was $545,000 compared to $9,000 in 2016, primarily the result of the deferred tax adjustments discussed in the fourth-quarter results.

“While our results from operations improved in 2017 when compared to 2016, we remain focused on growing sales through new product and business development by providing additional tools and support with programs to attract new distributors and customers,” said Ryan A. Montgomery, President.

“In mid-April, we are introducing an additional whey-based version of our flagship NOW product. This new version is in response to consumer trends and offers an alternative to those that prefer a whey protein based product,” commented Montgomery.

Other distributor/customer recruitment programs include continued free ground shipping for new distributors reaching the Quick Start and Master Affiliate business levels, an additional 10 percent discount on autoship orders placed by Preferred Customers, and a free product credit to distributors for enrolling three new Preferred Customers with a minimum order amount.

Additionally, a new mobile app is in development for launch in April that will allow distributors to perform most of their key sales and recruiting functions via a smartphone or tablet, including enrollment of new distributors and customers, placing orders and tracking downline organizational activity.

“Lastly, our Fit3TM program continues to grow in popularity throughout the Reliv distributor base. It’s not just about the Fit3 products, it’s also a fitness and lifestyle transformation,” stated Montgomery.

Reliv had cash and cash equivalents of $3.3 million as of December 31, 2017, compared to $3.6 million as of December 31, 2016. Net cash used in operating activities was $157,000 in 2017 compared to $1.5 million of cash generated from operations in the prior-year period.

As of December 31, 2017, Reliv had 33,620 Distributors and Preferred Customers – a decrease of 12.6 percent from December 31, 2016 – of which 3,910 are Master Affiliate level and above. The number of Master Affiliates decreased by 26.5 percent compared to the year-ago total. Master Affiliate is the level at which Distributors are eligible to earn generation royalties. With the formal introduction of the Preferred Customer program in the United States and Canada in February 2016, Reliv now includes Preferred Customers as part of Active Distributor statistics.

About Reliv International, Inc.

Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address essential nutrition, fitness and weight loss and targeted solutions. Reliv is the exclusive provider of LunaRich® products, which optimize levels of lunasin, a soy peptide that works at the epigenetic level to promote optimal health. The company sells its products through an international network marketing system of independent distributors in 15 countries. Learn more about Reliv at reliv.com, or on Facebook, Twitter or Instagram.

Statements made in this news release that are not historical facts are “forward-looking” statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or similar expressions. Factors that could cause actual results to differ are identified in the public filings made by Reliv with the Securities and Exchange Commission. More information on factors that could affect Reliv’s business and financial results are included in its public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which are available on the Company’s web site, reliv.com.

--FINANCIAL HIGHLIGHTS FOLLOW –

Reliv International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31 December 31
2017 2016
(Unaudited) (Audited)
Assets
Current Assets:
Cash and cash equivalents$3,272,788 $3,606,817
Accounts receivable, less allowances of
$26,300 in 2017 and $26,700 in 2016 29,760 126,113
Accounts and note due from employees and distributors 138,497 139,931
Inventories 4,555,485 4,487,830
Other current assets 399,154 571,377
Total current assets 8,395,684 8,932,068
Other assets 7,003,073 7,679,357
Net property, plant and equipment 5,677,239 5,854,302
Total Assets$21,075,996 $22,465,727
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses$3,212,634 $4,234,305
Current portion of long-term debt 3,045,421 389,096
Long-term debt - noncurrent - 2,518,341
Other noncurrent liabilities 453,354 409,813
Stockholders' equity 14,364,587 14,914,172
Total Liabilities and Stockholders' Equity$21,075,996 $22,465,727
Consolidated Statements of Operations
Three months ended December 31 Year ended December 31
2017 2016 2017 2016
(Unaudited) (Unaudited) (Unaudited) (Audited)
Product sales$9,271,433 $9,823,376 $38,751,357 $42,004,961
Handling & freight income 663,616 814,273 3,037,425 3,507,875
Net Sales 9,935,049 10,637,649 41,788,782 45,512,836
Costs and expenses:
Cost of products sold 2,287,759 2,294,513 9,401,406 10,024,021
Distributor royalties and commissions 3,432,631 3,749,861 14,685,553 16,095,032
Selling, general and administrative 4,073,412 4,317,861 17,885,226 20,205,762
Total Costs and Expenses 9,793,802 10,362,235 41,972,185 46,324,815
Income (loss) from operations 141,247 275,414 (183,403) (811,979)
Other income (expense):
Interest income 25,271 26,317 101,901 107,006
Interest expense (29,782) (24,521) (109,254) (106,682)
Other income (expense) (1,673) (30,919) 38,844 195,600
Income (loss) before income taxes 135,063 246,291 (151,912) (616,055)
Provision (benefit) for income taxes 517,000 (26,000) 545,000 9,000
Net income (loss)$(381,937)$272,291 $(696,912)$(625,055)
Earnings (loss) per common share - Basic$(0.21)$0.15 $(0.38)$(0.34)
Weighted average shares 1,845,000 1,845,000 1,845,000 1,845,000
Earnings (loss) per common share - Diluted$(0.21)$0.15 $(0.38)$(0.34)
Weighted average shares 1,845,000 1,845,000 1,845,00 1,845,000

Reliv International, Inc. and Subsidiaries
Net sales by Market
(in thousands)Three months ended December 31, Change from
2017
2016
prior year
Amount% of Net
Sales
Amount% of Net
Sales
Amount%
United States$7,68377.3% $8,40079.0% $(717)-8.5%
Australia/New Zealand 2122.1% 2542.4% (42)-16.5%
Canada 2342.4% 2662.5% (32)-12.0%
Mexico 940.9% 1111.0% (17)-15.3%
Europe 1,17911.9% 1,14710.8% 32 2.8%
Asia 5335.4% 4604.3% 73 15.9%
Consolidated Total$9,935100.0% $10,638100.0% $(703)-6.6%
Net sales by Market
(in thousands)Year ended December 31, Change from
2017
2016
prior year
Amount% of Net
Sales
Amount% of Net
Sales
Amount%
United States$32,47577.7% $35,59278.2% $(3,117)-8.8%
Australia/New Zealand 9232.2% 1,0792.4% (156)-14.5%
Canada 9152.2% 1,0652.3% (150)-14.1%
Mexico 4451.0% 5301.2% (85)-16.0%
Europe 4,57811.0% 5,49112.0% (913)-16.6%
Asia 2,4535.9% 1,7563.9% 697 39.7%
Consolidated Total$41,789100.0% $45,513100.0% $(3,724)-8.2%
The following table sets forth, as of December 31, 2017 and 2016, the number of our Active Distributors/Preferred Customers and Master Affiliates and above. The total number of active distributors includes Master Affiliates and above. We define an active distributor as one that enrolls as a distributor or renews his or her distributorship during the prior twelve months. Master Affiliates and above are distributors that have attained the highest level of discount and are eligible for royalties generated by Master Affiliate groups in their downline organization. In February 2016, we introduced a formal Preferred Customer program in the United States and Canada. As a result, we are including Preferred Customers as part of our Active Distributor count. Preferred Customer programs were previously in place in Europe and other foreign markets. Preferred Customers represent approximately 4,990 and 5,050 of the Active Distributor count as of December 31, 2017 and 2016, respectively.
Active Distributors/Preferred Customers and Master Affiliates and Above by Market
As of 12/31/2017 As of 12/31/2016 Change in %
Active
Distributors
and Preferred
Customers
Master
Affiliates and
Above
Active
Distributors
and Preferred
Customers
Master
Affiliates and
Above
Active
Distributors
and Preferred
Customers
Master
Affiliates and
Above
United States 23,0502,820 27,2204,080 -15.3%-30.9%
Australia/New Zealand 1,100110 1,530130 -28.1%-15.4%
Canada 66090 840150 -21.4%-40.0%
Mexico 71060 94090 -24.5%-33.3%
Europe 3,800450 4,860530 -21.8%-15.1%
Asia 4,300380 3,090340 39.2%11.8%
Consolidated Total 33,6203,910 38,4805,320 -12.6%-26.5%

For more information, contact:

Steve Albright
Chief Financial Officer
(636) 733-1305

Source:Reliv' International, Inc.